Monday, September 23, 2013

Report: Africa Enterprise Hardware Market Declines

The Middle East and Africa (MEA) enterprise hardware market, comprising servers and external storage, continues to stagnate, with year-on-year growth of just 2.8% recorded for Q2 2013, according to the latest insights from International Data Corporation (IDC).
Referencing its 'EMEA Quarterly Server and Disk Storage Systems Tracker', the research firm today announced that enterprise revenue in MEA totalled $663.4 million for the quarter, with infrastructure deals in the oil and gas, telecommunications, and banking, financial services, and insurance (BFSI) verticals accounting for much of that figure.
Continuing social and political unrest across much of the region acted as a severe inhibitor to enterprise investment, according to Zeeshan Gaya, research manager for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey: "Ongoing instability in several parts of the Middle East and Africa region caused enterprise spending to slow down, while large projects within the government sector, traditionally one of the major investors in servers and storage, were put on hold."
The MEA region’s x86 server market witnessed a 5.2% year-on-year increase in
value but a 5.4% decline in unit terms during the second quarter of 2013. "This growth in the x86 server market's value, as well as the corresponding decline in volume, can be attributed to the adoption of virtualization technologies that utilize fewer server units than traditional data centres," adds Gaya.
The region's external storage market experienced subtle growth of 3.0% year on year in Q2 2013. ''Barring a few bright spots in the region, most of the bigger countries witnessed a decline in storage investment during this quarter, with pipeline projects remaining uninitiated," says Swapna Subramani, a senior research analyst at IDC Middle East, Africa, and Turkey. "However, key infrastructure projects in the region tend to be implemented toward the second half of the year."
The enterprise hardware market in the Gulf Cooperation Council (GCC) countries registered mixed results in Q2 2013 with the UAE and Saudi Arabia seeing a decline while smaller countries like Oman and Bahrain posted exceptional growth, bolstered by projects in the oil and gas and telecommunications verticals, respectively. Qatar and Kuwait also witnessed healthy growth, owing to infrastructure investments across various verticals.
North Africa (specifically, Morocco, Algeria, and Tunisia) witnessed healthy year-on-year growth of 14.4% in Q2 2013 after experiencing successive declining quarters. This growth can be specifically attributed to investments within the telecommunications vertical across the region, as well as to a few significant oil and gas deals in Morocco. The South African enterprise market declined markedly in Q2 2013, suffering a considerable contraction of 11.4% year on year. Egypt's enterprise hardware market shrunk 15.8% over the same period, owing to curbs on spending across most verticals, with investments limited to just a few enterprises from the very large businesses segment. ''The country’s continued political turmoil means our outlook for Egypt is bearish for the rest of the year,'' Subramani adds.
On the supply side, HP retained top spot among the vendors competing in the MEA server market in Q2 2013 with 37.6% market share. IBM and Dell followed in second and third place, respectively. Cisco's performance was the bright spot in the MEA server market of Q2 2013, with the vendor recording an 89.4% increase in revenue year on year to claim share from the market leaders following the adoption of an aggressive blade server strategy for the region. EMC continued its dominance within the external storage market, claiming 46.3% share of the total disk storage. IBM and HP followed in second and third place, respectively.


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